Preparing for 2008 cotton creates nervous feeling

Jackie Warren, like many West Texas cotton farmers, took time last fall to appreciate the exceptional yields and quality he made from the 2007 crop. Then he got down to the business of figuring out how to do it again.

“I’m as nervous as I’ve ever been. I’m trying to figure out 2008,” he said during an impromptu interview at the recent Beltwide Cotton Conferences in Nashville. “It’s good to be at the Beltwide to talk with optimistic people. I know a lot of people here are working on a variety of production problems. Cotton prices have increased for the first time in years and I hope they stay up. Markets look better than they did in early December.”

Warren, who farms near Lamesa, will rely on proven varieties, possible changes in his crop mix and maybe some equipment upgrades to offset a significant increase in production costs for the 2008 crop.

“Energy, fertilizer and labor costs will be higher this year,” Warren said

“And every piece of equipment we use will be more expensive. I need to make fewer trips this year.”

He’s considering switching from 8-row to 16-row equipment. “A lot of farmers in our area are thinking about switching to 16-row units,” he said. “Information I’ve seen indicates cost of 16-row equipment will not be higher than 8-row, in the long run. I think we’ll save about 40 percent on fuel. Factoring in the cost of new equipment and pro-rating that over five years, it’s still a positive move.”

He could eliminate about half his equipment inventory. “I have six tractors and six planters and with 16-row equipment I can cut back to three each. I’ll save as much as $90,000 on labor and about $60,000 on fuel.”

He says 16-row units “do a beautiful job, especially with a guidance system. And it’s easier to deal with three hired hands and three sets of equipment.”

Warren says each crop year comes with its own sets of unknowns. “And there is no longer much room for error.”

He’ll do what he can to protect his investment. “I’ll try to cover every acre to the maximum with crop insurance.”

He says applying all his fertilizer early may not be a sound practice in West Texas. “We might not get a planting rain, and we can get hailed out. We can still come back with other crops, milo or peas, for instance. Peanuts look good this year. Contract offerings for 2008 look better than they did last year.”

He said peanuts work well with cotton. “We can get better yields with cotton behind peanuts. We can get a break for a year and see about a half-bale increase in cotton yields when we rotate back. We also gain some fertility advantages.”

Warren said he’ll watch peanut opportunities carefully and may plant a few acres if the opportunity looks good. He said he’d need plenty of water. “Some of my water supply is not high quality because of salinity. I would want to use a high volume of irrigation to keep salt off the soil surface.”

He said dryland acres would be “wall to wall cotton unless we see some drastic change.

“We’re also seeing some Conservation Reserve Program acres come out of the program this year,” Warren said. “Some of that likely will go back to cotton.”

But West Texas farmers have other rotation options this year that offer profit potential. Irrigated wheat is one possibility. Milo is another. “I hear rumblings from some dryland cotton farmers about rotating with 25 percent of their acreage in milo. That’s a good rotation. Milo builds up residue in the soil and helps with disease control. It also helps the budget. Inputs for milo are less than for cotton.”

He said current milo price also makes it a good option. “At $4 a bushel, milo will lose money or break even at best. We have an opportunity to capitalize on good prices now and we need the rotation.”

He’s looking at cotton variety options for 2008, but is hesitant to change from what has worked. He planted FM 9060 Flex and FiberMax 958 last year. “It’s hard to get away from something that’s never failed us.

“Our 2007 crop was very good,” he said. “We got an early stand and had a wonderful fall that made an extra half bale. Good fall weather made West Texas shine.”

He said rainfall was timely. “We were pretty dry in July and to the end of August. But we got a good rain the first of September. Timing was perfect and that made us more cotton.”

He said a volatile spring set the crop back early, but the open, warm fall and timely rain allowed the crop to catch up.

He’s looking at other cost-saving practices. “Applying livestock manure is not a common practice in this area yet,” he said. “We don’t have livestock or dairy facilities close enough that freight cost is not an issue. But feedlots and dairies need to get rid of it and we need to use it. We will see more of it.”

Warren has put the 2007 crop success behind him and is focused on 2008. He’s farmed for nearly 40 years. “I’ve seen plenty of ups and downs and it always comes back to doing what keeps us in business. This blip in costs will settle out.”

In the meantime, he said he can only “keep my head up and seize any opportunity that comes along.”